The undersigned, acting under delegated authority, has fully considered all available facts and information relevant to the factors of Section 6 of the Federal Deposit Insurance Act and relating to the application for Federal deposit insurance, with membership in the Bank Insurance Fund, for Earthstar Bank, a proposed new state nonmember bank to be located at 376 Second Street Pike, Upper Southampton Township, Bucks County, Pennsylvania, and has concluded that the application should be approved.

Accordingly, it is hereby ORDERED, for the reasons set forth in the attached Statement, that the application submitted by Earthstar Bank for Federal deposit insurance be, and the same hereby is, approved subject to the following conditions:

1. That beginning paid-in capital funds of not less than $8,000,000 be provided, and that the Tier 1 capital to assets ratio as defined in Part 325 of the FDIC's Rules and Regulations at the time of application, be maintained at not less than eight percent during the first three years of operation;

2. That any changes in proposed management or proposed ownership (10 percent or more of stock), including new acquisitions of or subscriptions to 10 percent or more of the stock, will render this commitment null and void unless such proposal is approved by the Regional Director of the FDIC's New York Regional Office ("Regional Director") prior to the opening of the institution;

3. That the Bank shall operate within the parameters of the business plan submitted to the FDIC. Furthermore, during the first three years of operations, the Bank shall notify the Regional Director and the State Banking Commissioner of any proposed major deviation or material change from the submitted plan 60 days before consummation of the change;

4. That the Bank develop and submit for Regional Director review, a sound information security program that identifies, measures, monitors, and manages potential risk exposures as detailed in FIL-68-99, Risk Assessment Tools and Practices for Information System Security, dated July 7, 1999, prior to opening;

5. That an accrual accounting system be adopted for maintaining the Bank's books;

6. That the Bank will have adequate fidelity coverage;

7. That the Bank will obtain an audit of its financial statements annually for at least the first three years after deposit insurance is effective, and furnish a copy of any reports (including any management letters) to the Regional Director within 15 days after their receipt. Furthermore, the Bank shall notify the Regional Director within 15 days when a change in its independent auditor occurs;

8. That the Federal deposit insurance shall not become effective unless and until the applicant has been established as a state nonmember bank, that it has authority to conduct a banking business, and that its establishment and operation as a bank has been fully approved by the state authority;

9. That until the conditional commitment herein granted for deposit insurance becomes effective, the FDIC shall have the right to alter, suspend, or withdraw said commitment should any interim development be deemed by the FDIC to warrant such action; and

10. That if Federal deposit insurance has not become effective within twelve months from the date of the ORDER, or unless, in the meantime, the FDIC approves a request for an extension of time, the consent granted shall expire at the end of the said twelve-month period.

Pursuant to the provision of Section 5 of the Federal Deposit Insurance Act (12 U.S.C. § 1815), an application for Federal deposit insurance with membership in the Bank Insurance Fund has been filed on behalf of Earthstar Bank, a proposed new state nonmember bank to be located at 376 Second Street Pike, Upper Southampton Township, Bucks County, Pennsylvania.

The bank will initially open a small bank office that will offer conventional banking services through traditional delivery channels. However, its ultimate strategy is to focus on electronic delivery of financial services primarily through the Internet. Upon opening, the bank will have an Internet web page that will be largely a marketing brochure. Then, within a short period of time, it will launch a transactional web page where customers can view account activity, transfer balances and pay bills over the Internet. Eventually, the bank plans to expand its Internet presence by offering a wider range of electronic products and services to a broader geographic region.

For the purposes of this proposal, the investment in fixed assets is reasonable, capital is adequate, future earnings prospects are favorable, and management is considered satisfactory. Corporate powers to be exercised are consistent with the purpose of the Federal Deposit Insurance Act. No formal objections to this application have been filed with the FDIC and no undue risk to the Bank Insurance Fund is apparent.

Accordingly, based upon careful evaluation of all available facts and information, the Associate Director, acting under delegated authority, has concluded that approval of the application is warranted, subject to the conditions enumerated in the ORDER.